Purchasing tax delinquent property from the State of Alabama

[Michael Lazzizzera]

I just received bids back from the state of Alabama for three parcels that are part of a salvage storage yard/business  It is comprised of 6 total parcels, 2 of which contains the main building and the remaining 4 are the storage yard.  I have purchased one of the rear parcels and was waiting on the bid from the state for the remaining three that were in tax delinquent status, which I received yesterday.  The parcels containing the building have been paid and are not in default, but the storage yard parcels have been delinquent since 2011.  I acquired the first parcel for about $1,750.00, and the remaining three will be around $5,400.00.  Fair market value of the 4 parcels would be around $50K.  Being that the properties have been delinquent over 5 years, I'd be receiving the tax deeds.  Should I decide to purchase the remaining 3 parcels, my questions are as follows:

- Aside from receiving the mandatory back taxes paid + 12% from the owner, what are some other strategies that I could apply to this situation?  Improve property and rent out as a contractor/vehicle storage yard possibly?

- Is there another profitable possibility for this scenario that I am overlooking?

- Should I walk away?

Any input would be greatly appreciated.  I've purchase a handful of tax sale properties and done fairly well, but this is new territory for me.  TIA!

[Roy Oliphant]

@Michael Lazzizzera

One thing to consider is do you want your name in the title chain on what may be an EPA challenged site.  Even purchasing as a tax deed can make you liable for any cleanup 

Otherwise, commercial properties are different in Alabama and some even hold that ANY expenses you have on the property are unrecoverable at redemption.  You will want to verify the current zoning to see if it can still be used as industrial after a change in ownership. That may restrict any potential revenue streams.